CALGARY, Oct. 3, 2014 /CNW/ – Seven Generations Energy Ltd. (“7G” or the “Company”) is pleased to announce the results of a recent independent resource evaluation performed by McDaniel & Associates Consultants Ltd. (“McDaniel”). McDaniel prepared the evaluation in compliance with the standards set out in National Instrument 51-101 of the Canadian Securities Administrators and the Canadian Oil and Gas Evaluation Handbook (COGEH). As of the effective date of the most recent assessment, July 1, 2014, McDaniel recognizes Total Best Estimate Contingent Resources of 728 million barrels gross (637 million barrels net) oil equivalent (“MMboe”) and Total Best Estimate Prospective Resources of 1,096 MMboe gross (986 MMboe net). The corresponding before tax net present values, using a discount rate of ten percent per annum, are $4.6 billion CAD for Total Best Estimate Contingent Resources and $4.2 billion CAD for Total Best Estimate Prospective Resources. The Contingent and Prospective Resource reports are an important step in the Company’s value creation cycle, validating significant resource inventory for future growth and providing confidence to enter into long term transportation and marketing discussions.
Ninety two percent of the Total Best Estimate Contingent Resources and 100 percent of the Total Best Estimate Prospective Resources are attributed to the Triassic Montney formation. The resource reports assign Best Estimate Contingent Resources to 148 gross square miles (93% working interest) and Best Estimate Prospective Resources to 398 gross square miles (98% working interest). The evaluations identify 829 gross Best Estimate Contingent drilling locations and 1,796 gross Best Estimate Prospective drilling locations. Of the 829 Best Estimate Contingent drilling locations, 81% are upper and middle Montney horizontal wells and 19% are Cadotte horizontal wells; and of the 1,796 Best Estimate Prospective drilling locations, 31% are upper and middle Montney horizontal wells and 69% are lower Montney wells. In total, McDaniel evaluated 526 square miles of gross Seven Generations land holdings.
About the Company
Seven Generations Energy Ltd. is a private, Canadian company engaged in the development of the Kakwa River Project (the “Project”). Located approximately 100 kilometers south of Grande Prairie, Alberta, the Project is a tight, liquids rich gas and light oil project in the early stages of development. 7G has a corporate headquarters in Calgary, Alberta and an operations headquarters in Grande Prairie, Alberta. For more information, please read the preliminary long form prospectus filed in connection with the Company’s initial public offering. A copy of the prospectus is available on the SEDAR website at www.sedar.com.
This press release may contain forward-looking information and statements regarding the Company. Any statements included in this press release that address activities, events or developments that the Company “expects,” “believes,” “plans,” “projects,” “estimates” or “anticipates” will or may occur in the future are forward-looking statements. Actual results may differ materially due to a variety of important factors. Among other items, such factors might include: planned and unplanned capital expenditures; changes in general economic conditions; uncertainties in reserve, resource and production estimates; unanticipated recovery or production problems; weather-related interference with business operations; the effects of delays in completion of, or shut-ins of, gas and liquids gathering systems, pipelines and processing facilities; potential costs associated with complying with new or modified regulations; oil and natural gas prices and competition; the impact of derivative positions; production expense estimates; cash flow and cash flow estimates; drilling and operating risks; the Company’s ability to replace oil and gas reserves; volatility in the financial and credit markets or in oil and natural gas prices; effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties. Except as required by law, the Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change. Do not place undue reliance on forward-looking information.
There is no certainty that any portion of the prospective resources will be discovered. There is no certainty that the contingent resources and, if discovered, prospective resources will be commercially viable to produce. Resources volumes and associated NPVs are for economic resources only; sub-economic resources have not been included
Seven Generations has adopted the standard of 6 Mcf:1 bbl when converting natural gas to oil equivalent. boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value.
Seven Generations Energy Ltd.
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Calgary, AB T2P 1B3
SOURCE Seven Generations Energy Ltd.
Image with caption: “McDaniel Reserve and Resource Reports (NPV10 pre-tax, $ Billions) (CNW Group/Seven Generations Energy Ltd.)”. Image available at: http://photos.newswire.ca/images/download/20141003_C3935_PHOTO_EN_6313.jpg
For further information: Pat Carlson, CEO, 403-718-0700